Gadhafi's stolen billions stashed in London

As his country teeters on the brink, the embattled dictator Colonel Gadhafi is clawing for survival - both political and financial. Whether he is toppled or not, Gadhafi is desperate to preserve his fortune - some estimate it to be as much as $94 billion - which has been squirrelled away in safe havens across the globe. Yesterday, we learnt that the Treasury has set up a specialised unit to trace Gadhafi's assets in Britain.

So should we be surprised to learn that much of his wealth has been salted away here? As we shall see, the warm embrace of the Gadhafis into our society - particularly Saif, the dictator's second son - may have offered financial gain, but it has also brought shame to our shores. Only now can we see the damage done by those who rehabilitated the Gadhafis on the international stage.

This was painfully revealed when Saif, a supposed friend of the West, spoke on Libyan television this week. Saif took the awkward manner of an international plutocrat, forced only by circumstances out of his usual exalted milieu of Blairs, Deripaskas, Mandelsons and Rothschilds, to address Libya's "little people".

The "little people" are the protesters in Benghazi, an area now largely freed from government forces. This region in the east of the country has long been treated as Tripoli's poor relation - mainly because King Idris's regime was strong here before Gadhafi's 1969 coup. How demeaning it must have been for Saif to even talk to such a poor, insignificant rabble. He and his sibling Muatassim are so accustomed to the high life that they have paid $1 million a pop to hear Mariah Carey, Beyonce and Usher sing at their birthday parties. Perhaps Mariah sang Can't Let Go or Can't Take That Away From Me - those lyrics of hers seem curiously apt today.

It became clear to me from his 45 minute monologue that Saif, friend of the Duke of York, was just another dictator in a flashy suit. Whatever plutocrat's polish he had acquired along with his MSc and PhD at the London School of Economics was rapidly shed. Jabbing his forefinger, Saif warned that the besieged Gadhafis would "fight to the last bullet".

Much of Libya's wealth, generated by crude oil and gas, has apparently been looted by Gadhafi and his regime. His sons vie between them for such rich pickings as the franchise to sell Coca Cola in Libya.

As well as Saif, the LSE seminarian and habitue of London casinos and nightclubs, other Gadhafi brothers include Hannibal, whose model wife Aline's face has had several nasty encounters with doors and furnishings in swanky hotels in Geneva and London.

Aline's not the only one to have come a cropper. When Hannibal was accused of assaulting two maids in a Swiss hotel, and subsequently arrested, Gadhafi retaliated by arresting Swiss nationals in Libya (one poor chap found himself in solitary confinement for more than 50 days) and even suspended oil deliveries to Switzerland, as well as withdrawing money and assets worth nearly $6.3 billion from Swiss banks. Similar "heat" was applied to Blair's government over the release of Lockerbie bomber Abdulbaset al-Megrahi, together with intercession by former MI6 personalities such as Mark Allen, who had moved on to well rewarded positions at BP.

What's clear is that just as controversy and violence follows the Gaddafi clan, so does the stench of filthy lucre.

The main vehicle for the Gadhafi's wealth is the $70 billion Libyan Investment Authority (LIA), a "sovereign wealth fund" set up in 2006 to spend the country's oil money. Let's call it Gadhafi Inc. In Britain, its assets include 3 per cent of the publishing giant Pearson, which owns the Financial Times and Penguin Books; and several prestigious office blocks, including 14 Cornhill, opposite the Bank of England, and Portman House, home to several major stores in Oxford Street.

The LIA's huge investment in Britain happily coincided with the meeting of minds between our leaders and the Libyans over the release of the Lockerbie bomber. Likewise, British investment in Libya has soared in recent years, with some 150 of our companies - from BP to Next - establishing a lucrative foothold there. Extraordinarily, Saif told a British newspaper last year that his "good friend" Tony Blair had become an adviser to the LIA - an allegation the former PM denies.

And it's not just business. The Gadhafis had ingratiated themselves into the upper echelons of British society, handily aided by Saif's charm and the sage-like status apparently conferred by his LSE doctorate. It is reported that Saif was even hosted at Buckingham Palace and Windsor Castle by the Duke of York. To go with this highfalutin, upper-class lifestyle, Saif also purchased a $15 million mansion in Hampstead - complete with suede-lined cinema room and swimming pool. Land Registry documents reveal that he used a British Virgin Islands-registered company, Capitana Seas, to make the purchase.

So successful was his adoption of British ways that he was lauded at the LSE by Professor David Held in a speech. It described his former student as: "Someone who looks to democracy, civil society and deep liberal values for the core of his inspiration."

Now keen to prove that it is not as amorally venal as many suspect, the LSE has announced it will not take more of the $2.3 million pledged by Saif than the $472,800 it has already spent on its weighty purposes. It is worth noting that Mark Allen, who is credited with bringing Gaddafi senior in from the cold, and Tony Blair's former chief of staff Jonathan Powell are present on the board of the LSE's IDEAS cost centre, while its director, Sir Howard Davies, is a quondam adviser to the LIA. Tony Blair is a highly paid consultant to JP Morgan, the U.S. investment bank that handles the LIA's liquid funds. Small world, isn't it?

Swinging London is but one hub of Gadhafi Inc. - a useful networking site where the Rothschilds were able to point Saif Gadhafi to investment opportunities in marina complexes in Montenegro. It's known that Saif had a desire to replicate a Dubai-style tax- and visa-free enterprise zone north of Tripoli, as well as developing luxury resorts near the spectacular Roman ruins of coastal Libya. Funds for the latter emanate from Magna Holdings, a Bermuda-based company chaired by Charles Powell - yes, you guessed it, that's the brother of Jonathan Powell - and the firm responsible for Gadhafi Tower, a 50-storey development in Tripoli.

Ties between Libya and its former colonial master, Italy, are also dense. A quarter of Libya's oil and 15 per cent of its natural gas goes to Italy, in the last case via the Green Stream pipeline. Gadhafi Inc. owns significant shares in Italy's ENI oil corporation, Fiat and Finmeccanica, the Italian aerospace and defence conglomerate. Its 7.5 per cent holdings in the football team Juventus and the Unicredit bank are more controversial, exercising the Northern League coalition partners more than Prime Minister Silvio Berlusconi. This may not be unrelated to the fact that both he and the Libyans are heavily invested in a Paris-based film company, Quinta Communications, which makes Arabic language thrillers.

Yes, as in Britain, the Italian political class has not been fastidious in its Libyan dealings. This may be why Italy's response to the crisis has been mixed, echoing Gadhafi's warnings of a series of al-Qaida emirates, or of a tidal wave of African migrants, if the Libyan lion ceases to roar at Europe's southern gates.

And, as one would expect of the self-styled "King of Kings", Gadhafi Inc. has major investments in sub-Saharan Africa. The ex-footballer Sa'adi Gadhafi, the third son of the dictator, took charge of all the family's investments in Robert Mugabe's Zimbabwe, where the Libyans were keen on developing agriculture and tourism. Much Libyan money has also been disbursed in Chad, Sudan, Sierra Leone and Liberia.

Various things may happen in Libya, where the army lacks the unity and prestige of its Egyptian analogue, and tribal allegiances are potent. As generals, ministers, diplomats and brave fighter pilots defect, the regime will be reduced to the hardcore of Gadhafi and his sons. Threats to destabilize the flow of oil to Europe are not as effective as they might be since the Saudis, who hate Gadhafi's guts, can increase production.

There are more local lessons for us in this story. It was predictable that revolutionary Left regimes - Castro, Chavez and Noriega - would defend Gadhafi, even as his jets reportedly strafed "his" own people.

But Britain's gossip columns and glossy magazines also indulge a deracinated group of international plutocrats whose greed is aroused by the oil and gas revenues Gadhafi Inc. has systematically embezzled. Rather than mouthing empty platitudes about orderly transition to democracy, in a country where civil society has been suffocated by a police state, our government should confiscate all the Gadhafis' assets, so as to return them to the Libyan people. After all, in all its disgusting dealings with Libya, Britain knows that money talks.

Mariah Carey might be excused - but London's high society and academic circles might be more fastidious too about consorting with such a grotesque as this ghastly murderous man.

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